After the Bitcoin bull market in 2021, more and more investors have begun to pay attention to Bitcoin, a digital currency. What exactly is the reason that prompted investors to flock to it and then hoard Bitcoin? This article will explore this phenomenon from multiple perspectives, analyzing the reasons behind it, market trends and future prospects.

The rise of Bitcoin can be traced back to 2009, and the blockchain technology behind it provides security and transparency for digital currencies. Over time, Bitcoin has gradually evolved from a niche investment tool to a highly watched asset worldwide. Especially in 2021, with the economic recovery of various countries and the intensification of inflation, investors began to re-examine the value of Bitcoin.

First of all, the bull market in 2021 was driven by multiple factors. Changes in the global economic environment have led many investors to seek assets to fight inflation. Bitcoin is regarded as "digital gold" by many investors due to its limited supply (21 million coins). In the context of increased volatility in traditional financial markets, Bitcoin has shown relative risk resistance, which has attracted a large number of institutional investors to enter the market. For example, companies such as Tesla and Square have included Bitcoin in their balance sheets, further increasing Bitcoin's market value and market recognition.

Secondly, with the popularity of Bitcoin, more and more trading platforms and financial services have begun to support Bitcoin transactions. The emergence of these platforms has lowered the threshold for investors to enter the market, allowing more ordinary investors to participate in Bitcoin investment. Whether it is buying Bitcoin through exchanges or investing through various financial products, the way to obtain digital currency has become more convenient. For example, the launch of applications such as Robinhood has made it easy for young investors to access Bitcoin, thereby promoting the activity of the market.

In addition to changes in the market environment, investors' psychology is also quietly changing. In 2021, many investors began to realize the potential value of Bitcoin, especially after experiencing the economic uncertainty brought about by the epidemic. People's concerns about the future make them willing to transfer part of their assets to digital currencies such as Bitcoin in order to seek higher returns in an uncertain economic environment. The price of Bitcoin has hit new highs throughout the year, attracting a lot of eyeballs and forming a "follow the trend" effect.

In addition, the influence of social media has also emerged in this process. Many investors learn about Bitcoin's dynamics through social media and participate in discussions. On platforms such as Twitter and Reddit, discussions about Bitcoin are endless, and many investors share their investment strategies and experiences on these platforms. The rapid spread of this information has enabled the Bitcoin investment boom to spread rapidly, further boosting investor enthusiasm.

However, despite the bull run that Bitcoin has experienced in 2021, investors also need to remain vigilant. The Bitcoin market is extremely volatile, and sharp price fluctuations may cause investors' wealth to shrink rapidly. Therefore, when chasing the Bitcoin craze, investors must act within their means and treat it rationally. Many experts suggest that investors should consider Bitcoin as part of their asset allocation, not all of it.

Looking ahead, the market outlook for Bitcoin is still full of uncertainty. On the one hand, as more and more companies and institutions begin to accept Bitcoin, market acceptance may further increase; on the other hand, uncertainty in regulatory policies may also become a stumbling block to the development of Bitcoin. Governments have different attitudes towards digital currencies. Some countries have taken strict regulatory measures against Bitcoin, while others have actively encouraged the development of digital currencies. This policy uncertainty makes the future of Bitcoin full of variables.

When summarizing the phenomenon of the Bitcoin bull market in 2021, it is not difficult to find that investors' enthusiasm for Bitcoin is not only due to its potential for investment returns, but also a response to future economic conditions. As digital currency gradually becomes more popular, more and more people are beginning to pay attention to this field, and more investors may choose to hoard Bitcoin in the future. We need to keep an open mind and pay attention to market changes in order to be invincible in this field full of opportunities and challenges.

In short, the 2021 Bitcoin bull market is the result of multiple factors. It not only reflects investors' judgment on the economic situation, but also reveals the potential position of digital currency in the future financial system. In this rapidly changing era, investors need to continue to learn and adapt in order to find their own place in the Bitcoin market. Although the future investment road is full of challenges, it is also full of opportunities, which is worth exploring and thinking about for each of us.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

New data shows that Bitcoin (BTC)’s current price action shows higher levels of “hoarding” activity than in previous bull cycles. According to on-chain analyst Willy
Woo, a metric known as “reflexivity” has been rising in recent months.

Woo explained that this metric measures the propensity of Bitcoin investors to continue to hold their Bitcoin as the price of Bitcoin rises. Essentially, it is another way to measure retail investors’ hoarding.

Bitcoin market capitalization returns per $1 invested Source: Willy Woo

The next bull run could surpass the previous cycle

There are several reasons why retail investors are holding Bitcoin compared to previous bull cycles.

If Bitcoin rises in 2021, most investors will view it as a post-halving bull run. Historically, Bitcoin has risen 12 to 15 months after each halving, setting new all-time highs each time. Based on Bitcoin’s trend of rising after halvings, retail investors may use holding Bitcoin as a strategy to avoid being too expensive to buy after a strong and sustained rise.

Bitcoin has shown amazing resilience during multiple potential black swan events. After an initial rebound from the pandemic-induced crash in March, it has remained above $10,000 despite a number of negative events.

Recently, Bitcoin prices plunged after the U.S. Commodities and Futures Trading Commission (CFTC) accused BitMEX of violating the Bank Secrecy Act.

Following the CFTC announcement, Bitcoin prices fell below $10,500 but quickly recovered to the $10,700 support level. Woo believes this could be due to the combination of two key factors. He explained:

“This (reflexivity) is that when prices rise, hoarders are more inclined to hold their coins. I had expected reflexivity to increase during the frenzy phase of a bull market, but it has been stable over the past two cycles. Compared to the previous cycle, reflexivity is increasing rather than unchanged. Although we now need to invest more money to achieve similar price gains, the impact of hoarders strictly holding Bitcoin is amplifying the gains for every dollar invested.

Going into the fourth quarter, industry executives believe that the US presidential election may be positive for Bitcoin, and active hoarding may further boost Bitcoin prices.

US presidential election and fourth quarter may boost Bitcoin prices

Industry executives and prominent investors in the cryptocurrency industry expect the upcoming presidential election in November to be positive for Bitcoin.

Su Zhu, CEO of Three Arrows Capital, said that the democratic election will drive Bitcoin due to various macro factors; he also believes that Trump's re-election may also be positive for Bitcoin.

He wrote: "Biden is extremely positive for Bitcoin because the Democratic Party may launch an unprecedented MMT agenda at a time of dollar weakness and fiscal deficits. That said, Trump is also positive for Bitcoin. ”

As Cointelegraph reported earlier this week, traders including Peter
Brandt believe that longer timeframes suggest a strong uptrend for Bitcoin. Favorable technical factors, strong fundamentals, and growing hoarding activity could drive a 2021 Bitcoin bull run.